KOTA KINABALU: Sabah employers want Bank Negara to take a closer look into the real financial position of borrowers as they appeal for an extension of the moratorium on loans.
Sabah Employers Association (SEA) president Yap Cheen Boon said that Bank Negara should examine the financial situation of many workers who are unable to pay up loans, let alone cover the bills for their living expenses.
He said that many were now facing financial problems, especially with the conditional movement control order (MCO) that came after most were trying to recover after the first MCO earlier this year.
Yap said that many employees and even employers in the state were now not only fearful of the Covid-19 pandemic but also their ability to repay their loans.
He said that statistics provided showed that 640,000 borrowers applied for repayment assistance nationwide on their loans from their respective banks, and added that such numbers raised more questions.
"Of the total pool of eight million borrowers including individuals and small and medium enterprises (SMEs) in the country, the fact that only 640,000 or 8% had chosen to apply (for a moratorium extension) raises more questions,” said Yap.
He said that Bank Negara should find out more about the data being provided by the banks and ask what happened to the other seven million borrowers and added that the central bank should see if those borrowers were able to raise the money to pay up.
Yap said that since Oct 1, banks were claiming an 85.5% repayment rate since October 1, but added that they were “diligently” deducting instalment amounts from borrowers' accounts within the first week of October.
“Such funds are invariably being put aside (by borrowers) for more critical purposes such as payment of overdue bills, food, and other expenses to stay afloat,” he said in a statement issued on Saturday (Oct 24).
He said that the SEA has seen cases where applications for moratorium extensions are still under review, whilst payments had been deducted in early October and that another deduction is looming in early November if no decision is forthcoming.
"It is not wrong to say that to allow deductions whilst applications are under review is self-defeating, if not hypocritical in nature. This is demoralising and imposes more pressure on individuals and businesses alike," he added.
Yap said that the situation might prevail till the end of the year and added that it would take time before things turn around.
He said that a loan moratorium should be extended until the end of the year to ease the financial burden of both employees and employers in Sabah.
Yap added that employees and employers in the state remained insecure as many economies of trading nations were recovering slowly due to the continuous rate of Covid-19 cases.
He said that the latest MCO has left some 800,000 workers at home and a moratorium on bank loans would help them amidst a massive contraction in the economy following the second set of movement restrictions put in place.
SEA is the latest organization to make the call for a loan moratorium with many chambers of commerce, political parties and unions also pushing for an extension of the loan moratorium.